Insurance

1. Key performance indicators of insurance organisations of the Republic of Belarus as of July 1, 2015

As of July 1, 2015, the insurance activity on the Belarusian insurance market is being carried out by 19 insurance organizations, including: 8 state organizations and the organizations with the state share in their statutory funds, 8 organizations with participation of foreign capital. Three insurance organizations implement voluntary life and supplementary pension insurance, 1 of them engages exclusively in reinsurance.

Over January-June 2015, insurance premiums on direct insurance and coinsurance operations totaled 3991.9 bn. BYR. In comparison with January-June 2014, the growth rate amounted to 110.5% (on a current basis).

The amount of insurance premiums on voluntary insurance totaled 2139.9 bn. BYR (the growth rate, in comparison with the similar period of 2014 is 108.5%). The share of voluntary insurance in the total amount of insurance premiums makes 53.6%.

The amount of insurance premiums on compulsory insurance totaled 1852.0 bn. BYR (increase in comparison with the similar period of 2014 amounts to 12.9%). The share of compulsory insurance in the total amount of insurance premiums makes 46.4%.

Insurance reimbursement and insurance coverage payments countrywide amounted to 2268.1 bn. BYR in January-June 2015, which exceeded the similar period of 2014 by 49%.

The share of insurance payments in the total amount of insurance premiums for the period of January- June 2015 amounted to 56.8%.

Certain performance indicators of insurance organizations of the Republic of Belarus as of July 1, 2015

BYR thousand

№

Name of insurance company

Premiums received under direct insurance and coinsurance agreements

Premiums including reinsurance

Payments received under direct insurance and coinsurance agreements

Insurance payments including reinsurance

Profits (losses) before tax *

Net profits (losses) *

1

2

3

4

5

6

7

8

1

Belgosstrakh

2 014 403 514

1 937 782 798

1 178 238 759

1 172 757 506

411 258 973

305 721 865

2

ZASO "Promtransinvest"

311 854 287

232 082 402

121 877 861

119 250 521

34 956 760

26 192 018

3

ZASO "TASK"

298 923 421

290 538 986

176 058 947

174 744 383

46 175 885

26 536 372

4

ZASO "Belneftestrakh"

291 182 485

283 726 219

139 502 159

146 443 413

32 888 167

22 606 335

5

"Beleximgarant"

239 768 545

185 358 922

146 118 416

141 452 383

175 308 661

84 468 148

6

ZAO "SК'Belrosstrakh"

126 525 957

124 088 017

65 159 645

67 152 137

22 876 348

14 989 864

7

SOOO "Belkoopstrakh"

114 596 435

119 104 479

64 102 286

63 234 849

8 284 129

5 588 484

8

OASО "B&B Insurance Co"

105 047 264

104 250 044

83 487 281

97 857 370

2 717 759

1 886 529

9

SBA ZASO "Kupala"

54 652 224

41 464 245

19 223 830

15 795 907

10 411 343

6 405 244

10

ZASO SK'"ERGO"

42 678 391

48 694 754

26 397 615

29 462 932

3 863 682

2 821 820

11

ZSAO "BelIngostrakh"

36 230 068

35 005 827

33 991 526

34 009 566

2 739 378

1 998 727

12

USP "Belvneshstrakh"

36 225 115

33 049 374

29 739 528

29 128 483

2 361 558

1 655 815

13

ZASO "KENTAVR"

28 740 005

31 455 487

33 097 259

35 104 911

1 483 344

1 062 578

14

IS ZAO "PPF Strakhovanie"

24 865 277

24 865 277

7 363 301

7 363 301

92 039 940

68 722 976

15

ZASO "GARANTIA"

8 670 941

8 598 452

1 498 509

1 419 036

20 318 880

15 192 237

16

OASO "BAGACh" **

4 175 235

4 482 526

9 623 100

10 231 236

(2 367 316)

(2 405 245)

17

ISP "ZEPTER INSURANCE" ***

1 626 958

1 437 159

2 606 788

2 688 124

1 162 203

484 659

18

ZASO "Delta Strakhovanie”

168 665

259 596

3 049 354

3 264 541

54 628 014

20 921 327

19

SOOO "Rosgosstrakh" ****

−

(1 687)

1 091 650

803 280

(669 275)

(844 338)

20

RUP "Belarusian National Reinsurance Organization"

−

144 703 652

−

25 711 462

100 173 659

62 048 009

21

RDUSP "Stravita"

226 138 114

226 138 114

87 465 604

87 465 604

13 954 754

13 954 754

22

USP "Priorlife" *****

18 591 811

18 591 811

34 906 618

34 906 618

4 092 512

3 025 317

23

OASO " Pension Guarantees"

6 654 559

6 654 559

1 720 571

1 720 571

32 313 147

24 116 861

24

OASO "MEGA POLIS" ******

168 143

168 143

1 732 739

1 732 739

(403 936)

(619 267)

* Negative items are specified in round brackets.
** The special permit (license) for insurance activity № 02200/13-00010, issued to OASO "BAGACh", has been terminated since May 1, 2015.
*** The special permit (license) for insurance activity № 0220/13-00052, issued to ISP "ZEPTER INSURANCE", has been terminated since May 1, 2015.
**** The special permit (license) for insurance activity № 02200/13-00055, issued to SOOO "Rosgosstrakh", has been terminated since October 7, 2014.
***** USP "Seventh Line" has been renamed into USP "Priorlife" (certificate № 806000018 as of January 19, 2015).
****** The special permit (license) for insurance activity № 02200/13-00002, issued to OASO "MEGA POLIS", has been terminated since October 17, 2014.

2. Updating of regulatory legal acts regulating insurance in the Republic of Belarus

Insurance in the Republic of Belarus is regulated by the Civil Code of the Republic of Belarus, legislative acts issued by the President and other acts of law.

The fundamental regulatory legal act regulating insurance is the Decree of the President of the Republic of Belarus dated August 25, 2006 N530 “Regarding insurance activity”. The Decree approves Regulation regarding insurance activities in Belarus (Regulation hereinafter) as well as procedures of 8 kinds of obligatory insurance and cancels a number of normative legal certificates, including Decree of the President of the Republic of Belarus dated September 28, 2000 N20 “Regarding insurance activity regulation improvement”.

According to the Regulation legal entities of Belarus as well as foreign legal entities operating in territory of Belarus, citizens of Belarus and residents without citizenship living in Belarus shall insure their property interests in Belarus only with business organizations established for conducting insurance activity and having special permits (licenses) for conducting insurance business in Belarus.

Foreign citizens staying in Belarus, stateless sojourners or nonresident aliens are entitled to insure their property interests in the republic of Belarus with Belarusian business organizations established for conducting insurance activity and having special permits (licenses) for conducting insurance business in Belarus unless other is stipulated by the legislation.

Activities of insurance enterprises and insurance brokers established outside Belarus are illegal and not allowed in the territory of Belarus unless they are registered in the Ministry of Finance and obtained special permits (licenses) for conducting insurance business.

“Insurers” means business organizations established for conducting insurance activity and having special permits (licenses) for conducting insurance business (hereinafter referred to as insurers, insurance enterprises).

“Insurance broker” means a business organization which conducts an agency insurance business in its own name by the order of an insurance enterprise, or an insured, or both of them at the same time on the basis of a special permit (license) issued by the Ministry of Finance.

State registration of insurers, insurance brokers as well as amending and annexing their founding documents is carried out according to the procedure stipulated by the economic entity registration law with respect to the points specified in the Regulation.

The minimum sum of authorized fund is equals to as follows:
1 million euro is for an insurer who deals in the kinds of insurance other than life insurance;2 million euro is for an insurer who deals in the kinds of insurance related to life insurance;5 million euro is for an insurer who deals exclusively in reinsurance.

Foreign investors’ payments for shares in an authorized fund of an insurer or an insurance broker shall be effected by cash means.

After state registration an insurer shall keep monetary assets in the amount corresponding to the minimum authorized fund amount on its bank accounts in the Republic of Belarus.

The property contributed to the insurer’s authorized fund is to be owned by the founders (partners) under the right of property and be necessary and applicable for such insurer’s activities.

Each founder’s investment rate (participant’s share in an authorized fund) shall not exceed 35 percent of an authorized fund of an insurer established in the form of a joint stock company, a limited liability company or a double liability company, with the exception of the investments (shares) of the Republic of Belarus and (or) its political units.

Alongside with the documents to be submitted in compliance with the economic entity registration law to obtain state registration an insurer or an insurance broker is to provide the Ministry of Finance with the information regarding qualifications of the candidates for the positions of managers, their deputies and chief accountants of the given insurer or insurance broker as well as documentary evidence of the founders’ (partners’) monetary means origin.

An insurance enterprise affiliated to a foreign investor is entitled to conduct insurance business in Belarus provided the foreign investor is an insurance enterprise which has been operating in compliance with the legislation of its state for at least 10 years.

A quota of foreign investors’ share in authorized funds of insurance enterprises is established by the Council of Ministers of the Republic of Belarus upon the approval of the President of Belarus.

In case the quota is exceeded the Ministry of Finance terminates registration of insurance enterprises with foreign investors and (or) issue of operating licenses of insurance to such enterprises.

Insurance enterprises affiliated to a foreign investors and (or) with over 49 percent of foreign investors’ share in their authorized funds can found separate divisions in Belarus as well as become founders (partners) other insurance enterprises upon obtaining authorization from the Ministry of Finance.

Such a permit can not be issued if the abovementioned quota is exceeded.

Objects of insurers’ activities can be as follows: insurance and investment activities, activities related to appraisal of insurance risks and damage assessment; appraisal and inspection of movable and immovable property in connection with insurance and issue of decisions about condition of such property; activities related to technical, medical and financial services provided for a different insurer or insured (insured, sufferer and any other person who lays insurance claim) in order to fulfill insurance contracts; assistance to other insurance enterprise in establishing reasons and type of damage per occurrence insured.

Insurance enterprise engaged in life insurance may not deal in other kinds of insurance.

Insurance enterprises and insurance brokers accrue a right to conduct insurance business and a right of agency correspondingly starting from the date of a special permit (license) issued by the Ministry of Finance in accordance with licensing law.

Insurance enterprise affiliated to a foreign investor and (or) with over 49 percent of foreign investors’ share in their authorized funds may not carry life insurance including compulsory state insurance, property insurance related to supplies, services or contract works for the needs of the state as well as insurance of property interests of the Republic of Belarus and its political units.

Belarusian insurance enterprises are obliged to insure risks of 10 percent performance of their obligations assumed under voluntary insurance contracts other, than life insurance, exceeding liability standard specified in the legislation with subsequent annual 10 percent increase of such obligations insurance only with the insurance enterprises founded by the Council of Ministers of Belarus in the form of state legal entity to carry out reinsurance alone in the order stipulated in laws and on the basis of reinsurance contracts concluded.

Regardless of the form of ownership an insurance enterprise in the case of its liquidation or termination of its license is obliged and in case economic court institutes bankruptcy proceedings against a debtor insurance enterprise is entitled to transfer its contractual obligations to another insurance enterprise or to terminate such contracts according to the procedure stipulated in the law.

In the order and terms stipulated in the legislation insurance enterprises are to publish their annual balance sheets and profit and loss statements after auditor’s acknowledgement of the data in them.

The Regulation also establishes the procedure of taking shares in authorized funds, ordinary or other voting shares into state ownership.

Government supervision of insurance activities in Belarus is carried out by the Ministry of Finance and its territorial units to provide compliance to insurance legislation, efficient development of insurance services, protection of rights and interests of insured, insurance enterprises and the state.

From 2002 “Beleximgarant” is a Paris Club member (Berne Union organization department for export credit agencies of Central and Eastern Europe) as an export credit agency supported by the government and operating in accordance with international requirements and export insurance operation system practice.

On August 25, 2006 a Decree of the President of the Republic of Belarus “Regarding encouragement of development of export of goods (services and works)” (hereinafter referred to as Decree) was passed.

Clause 2 of the Decree stipulates that an exclusive right to insure export risks supported by the state belongs to the Republic of Belarus and is exercised by “Beleximgarant” on its behalf.

Moreover in pursuance of clause 4 of the above mentioned Decree “Beleximgarant” approved and agreed with the Ministry of Finance the following regulation of voluntary insurance:

Voluntary insurance of short-, medium-, and long-term export contracts against political and commerce risks;

Voluntary insurance of investments made by the residents of the Republic of Belarus in foreign states against political risks;

Voluntary insurance of the risk of default on a credit granted to a domestic exporter on production of export goods (services, works) or to a resident of the republic of Belarus to effect payments for the goods(works, services) supplied by a domestic exporter;

Voluntary insurance of bank guarantee or other services granted by an exporter’s bank to foreign buyers.

The Ministry of Finance of the Republic of Belarus in compliance with the Decree of the President of Belarus “Regarding licensing some kinds of activities” N17 dated June 14, 2003, decided to include works and services corresponding to the abovementioned insurance regulations of into “Beleximgarant” special permit (license) of insurance activity.

As Bern Union is an international union of governmental, semi-governmental and private agencies which guarantee payments under export credits and direct investments cooperation in export risks insurance can be established between “Beleximgarant” and Chinese export credit agency Chinese Export Credit Insurance Corporation (SINOSURE) against security of the government and (or) Central bank of the country in question or Chinese banks and other finance and credit institutions.

Note:

From January 1, 2013, according to the legislation, the revenues and expenses of insurance companies are disclosed in the business accounts using accrual method.

Information:

Paragraph 2 of the Instructions on the peculiarities of income and expenditure accounting by insurance companies, approved by the Ministry of Finance of the Republic of Belarus on January 11, 2010, accrual method is defined as a disclosure of business transactions in the accounts and records in the fiscal period in which they actually were completed regardless the date of calculations.

Since January 1, 2013, insurance organizations reflect the accrual of insurance premiums under insurance (co-insurance, reinsurance) contracts in the accounting period, which gives insurance company the right for a premium (as of the date of signing the contract), established by law or contract, specification of insurance type, regardless the receipt of premiums.

Until the specified date, insurance premiums were recorded by the insurance companies in the accounting period, when they have been actually received from insurers.